value and the work of art
TRANSCRIPT
Guilherme da Fonseca-StatterGuilherme da Fonseca-StatterJune 2013June 2013
VALUEVALUE and theand the Work of ArtWork of Art
The Labor Theory of The Labor Theory of Value RevisitedValue Revisited
Value and the Work of ArtValue and the Work of Artor the Labor Theory of Value Revisitedor the Labor Theory of Value Revisited
Proposed Agenda Proposed Agenda
1. Introduction1. Introduction
2. Prices and Values2. Prices and ValuesDavid Ricardo and the «transformation problem»David Ricardo and the «transformation problem»The instrumental character of pricesThe instrumental character of prices
3. The emergence of Marginalism3. The emergence of MarginalismThe degenerescence of «Economics»The degenerescence of «Economics»
4. 4. What has the work of art got to do with all of this ?What has the work of art got to do with all of this ?
Guilherme da Fonseca-StatterGuilherme da Fonseca-StatterJune 2013June 2013
who knows almost everything there is to be known about the surface of the planet:who knows almost everything there is to be known about the surface of the planet:mountains, plains, ocean current, valleys, rivers, human setlements, roads, harbours...mountains, plains, ocean current, valleys, rivers, human setlements, roads, harbours...
Guilherme da Fonseca-StatterGuilherme da Fonseca-Statter
June 2013June 2013
But... who knows next to nothing about tectonic plates and continental driftBut... who knows next to nothing about tectonic plates and continental drift
The metaphor of an imaginary «geographer» The metaphor of an imaginary «geographer»
CAPITALCAPITALismism – Three analytical layers (or tiers) – Three analytical layers (or tiers)
Layer 3Layer 3«Accounting», political factors, cultural, historico-geographical
conditioners
Institutional AnalysisInstitutional Analysis
Layer of GovernanceLayer of GovernanceDescription of social and individual
evaluation of interess (or lack of it) of qualityand quantity of wealth socially produced
Layer 2Layer 2The «game» of Supply and Demand
«Partial» AbstractionUtilitario-Marginalist TheoryUtilitario-Marginalist Theory
Layer of PricesLayer of PricesVisible phenomenological expression
that results from the introducing of the entity«money» in the mediation of exchanges of values
Layer 1Layer 1«Complete» abstractionBinomial «energy/time»Could be on Earth or in
another galaxy
Labor theory of ValueLabor theory of Value
Layer of ValuesLayer of ValuesGoods and services, whose dimension is measured
according to certain criteria and «units of measure». Just like «volumes» and «weights» are expressed in liters/gallons and kilos/ pounds, this approach uses «Units of average social labor» and/or in terms of the
binomial «energy-time».
Layer 0 = Informal and Reciprocity EconomyLayer 0 = Informal and Reciprocity Economy
Guilherme da Fonseca-Statter - June 2013Guilherme da Fonseca-Statter - June 2013
Comparing different Comparing different approaches to the sameapproaches to the same
type of phenomenatype of phenomena
Two metaphors fromTwo metaphors fromthe «Natural» Sciencesthe «Natural» Sciences
Bio-Chemistry Earth Sciences
Tissues
Layer 3 System of GovernanceSystem of GovernanceWhich way to go
CellsHuman
Geography
Layer 2 System of PricesSystem of PricesSupply and Demand
MoleculesPhysical
Geography
Layer 1 System of ValuesSystem of ValuesCosts of Production Time/Energy
Atoms Geology
Protons, Neutrons, Electrons Nucleus
Layer 0 Systems of Social Reciprocity
Guilherme da Fonseca-Statter - June 2013Guilherme da Fonseca-Statter - June 2013
A short (A short (but very fundamentalbut very fundamental) bibliography) bibliography
William Petty - Political ArithmetickFrançois Quesnay – Tableau ÉconomiqueAdam Smith – The Wealth of NationsDavid Ricardo – Principles of Political EconomyThomas Malthus - Principles of Political EconomyJohn Stuart Mill – Principles of Political EconomyKarl Marx – CapitalKarl Marx – GrundrisseKarl Marx – Theories of Surplus ValueBöhm von Bawerk - Karl Marx and the Close of His SystemLadislaus Bortkiewicz - On the Correction of Marx's Fundamental Theoretical Construction in the Third Volume of "Capital"Ladislaus Bortkiewicz - Value and Price in the Marxian SystemRudolf Hilferding - Böhm-Bawerk's Criticism of MarxPaul Sweezy – The Theory of Capitalist DevelopmentJoseph Schumpeter – Capitalism, Socialism and DemocracyRonald Meek - Studies in the Labor Theory of Value,Joan Robinson – Joan Robinson – Economic PhilosophyEconomic PhilosophyPaul SamuelsonPaul Samuelson – ECONOMICS – ECONOMICSLawrence D. Miles – Techniques of Value Analysis and Engineering
metodologicalmetodological
HolismHolism
versusversus
metodologicalmetodologicalIndividualismIndividualism
The issue of «Agents Based Modelling»The issue of «Agents Based Modelling»
and «Agents based Computational Economics»and «Agents based Computational Economics»
Social ScienceSocial Science versusversus Social EngineeringSocial Engineering
Two very distinct approaches and perspectivesTwo very distinct approaches and perspectives
Guilherme da Fonseca-Statter
Two distinct approachesTwo distinct approaches
Metodological HolismMetodological HolismFrom systemic totality to component partsFrom systemic totality to component partsParts could be distinct and complementaryParts could be distinct and complementary
pproducers, consumers, entrepreneurs, workers,roducers, consumers, entrepreneurs, workers,peasants, intelectuals, engineers, managers...peasants, intelectuals, engineers, managers...
««Substance» of Value = «embedded» average social workSubstance» of Value = «embedded» average social work
Metodological Individualism Metodological Individualism From component parts to systemic totalityFrom component parts to systemic totalityParts are deemed to be all alike Parts are deemed to be all alike
… … we all are we all are «homo economicus»«homo economicus»
««Substance» of Value = One's own perception of Utility Substance» of Value = One's own perception of Utility
Guilherme da Fonseca-Statter
Value and the Work of ArtValue and the Work of Art
Guilherme da Fonseca-StatterGuilherme da Fonseca-StatterJune 2013June 2013
The Labor Theory of Value Revisited – Part 2The Labor Theory of Value Revisited – Part 2
«The «The natural pricenatural price, therefore, is, as it were,, therefore, is, as it were,the the central pricecentral price, to which the , to which the pricesprices of all of all commodities are continually gravitating.»commodities are continually gravitating.»
An Inquiry into the Nature and Causes ofAn Inquiry into the Nature and Causes of
the Wealth of Nations the Wealth of Nations
Book 1, Chapter 7Book 1, Chapter 7Of the Natural and Market Price of CommoditiesOf the Natural and Market Price of Commodities
by Adam Smith 1776by Adam Smith 1776
http://geolib.com/smith.adam/won1-07.htmlhttp://geolib.com/smith.adam/won1-07.html
The Relationship between The Relationship between ValueValue and and pricesprices
ValueValuepricesprices
pricesprices
pricesprices
pricesprices
pricesprices
pricesprices
The Relationship bewteen The Relationship bewteen ValueValue and and pricesprices
pricesprices
pricesprices
pricesprices
pricesprices
pricesprices
pricesprices
pricesprices
pricesprices
pricesprices
pricesprices
pricesprices
Guilherme da Fonseca-Statter
pricesprices
Prices arePrices are instrumental instrumental in the capture and accummulation of Valuein the capture and accummulation of Value
The «Price of Things» and the «Transformation Problem»The «Price of Things» and the «Transformation Problem»
Back to an old polemicsBack to an old polemics
The labor theory of ValueThe labor theory of Valueversusversus
The Marginalist theoryThe Marginalist theory (that only sees «prices»)(that only sees «prices»)
Price – Price – tendentially – represents Value – represents Value
Price deviationsPrice deviations from «underlying» valuefrom «underlying» value ((up and down...) ) will simply benefit some will simply benefit some
economic agents and harm otherseconomic agents and harm others
the «Transformation Problem»the «Transformation Problem»
The «holy grail» of a mathematical solutionor the search for a «magical» algorithmor the search for a «magical» algorithm
Ricardo's problemRicardo's problem,, not Marx's...not Marx's...
Marx merely tried to explain the mechanism through Marx merely tried to explain the mechanism through which capitalists «divide the spoils».which capitalists «divide the spoils».
«From those capitalists with a higher capability to «From those capitalists with a higher capability to "exploit" value added "exploit" value added to those capitalists with a higher to those capitalists with a higher
capability to control "fixed + constant" capital»capability to control "fixed + constant" capital»
«The measurement problem»«The measurement problem»
«Value (in "social time units") is too difficult to measure» - Paul Sweezy«Value (in "social time units") is too difficult to measure» - Paul Sweezy
Lawrence D. Miles – «Techniques of Value Analysis and Engineering»Lawrence D. Miles – «Techniques of Value Analysis and Engineering»
Jacques Lachnitt - "L'Analyse de la Valeur"Jacques Lachnitt - "L'Analyse de la Valeur"
Table elaborated (expanded upon) Karl Marx
Invested Capitals Value Added
«local»rate of profit
ConstantCapital
spent
Exchangevalue of
goods
Cost price of goods
Sales price of goods
Deviations between«values» «prices»
A B C D A + B + D = E B + D = F F + 20 = G H
80c + 20v 20 20% 50 90 70 90 0
78c + 22V 22 22% 45 89 67 87 - 2
82c + 18v 18 18% 35 71 53 73 + 2
76c + 24v 24 24% 30 78 54 74 - 4
84c + 16c 16 16% 40 72 56 76 + 4
74c + 26v 26 26% 50 102 76 96 - 6
86c + 14v 14 14% 40 68 54 74 + 6
72c + 28v 28 28% 45 101 73 98 - 8
88c + 12v 12 28% 25 49 37 57 + 8
70c + 30v 30 12% 30 90 60 80 - 10
90c + 10v 10 30% 20 40 30 50 + 10
1100 220 20% 410 850 630 850 0
Each «capitalist» adds to the «cost price» of goods the AMOUNT that corresponds to the rate of «normal profit»
The «holy grail» of a mathematical solutionor the search for a «magical» algorithmor the search for a «magical» algorithm
Ricardo's problem, not Marx's...Marx merely tried to explain the mechanism through which capitalists «divide the spoils».«From those capitalists with a higher capability to "exploit" value added to those capitalists with a higher capability to control "fixed + constant" capital»
«The measurement problem»«The measurement problem»
«Value (in "social time") is too difficult to measure» - Paul Sweezy«Value (in "social time") is too difficult to measure» - Paul Sweezy
Lawrence D. Miles – «Techniques of Value Analysis and Engineering»Lawrence D. Miles – «Techniques of Value Analysis and Engineering»
Jacques Lachnitt - "L'Analyse de la Valeur"Jacques Lachnitt - "L'Analyse de la Valeur"
Consumers just carry on with their lives striving Consumers just carry on with their lives striving to get «more value for their money»to get «more value for their money»
While production engineers routinely try new While production engineers routinely try new techniques to minimise time and effort (energy)techniques to minimise time and effort (energy)
While some economists fiddle with econometric models While some economists fiddle with econometric models in search of problems for their solutions,in search of problems for their solutions,
Guilherme da Fonseca-StatterGuilherme da Fonseca-StatterJune 2013June 2013
THE DEGENERESCENCE OF «ECONOMICS»THE DEGENERESCENCE OF «ECONOMICS»
Les Trous Noirs de la Science ÉconomiqueLes Trous Noirs de la Science Économique
Manifeste des Économistes AtterrésManifeste des Économistes Atterrés
Institute for New Economic ThinkingInstitute for New Economic Thinking
New Economics FoundationNew Economics Foundation
Post Keynesian EconomicsPost Keynesian Economics
Post-autistic EconomicsPost-autistic Economics
Real-World EconomicsReal-World Economics
Econo-PhysicsEcono-Physics
......
Value and the Work of ArtValue and the Work of Art
Guilherme da Fonseca-StatterGuilherme da Fonseca-StatterJune 2013June 2013
The Labor Theory of Value Revisited – Part 3The Labor Theory of Value Revisited – Part 3
The «paradox of value»The «paradox of value»
An economic good is supposed to satisfy three criteria:An economic good is supposed to satisfy three criteria:
1. To satisfy a human need or desire.1. To satisfy a human need or desire.
2. The existence of a perception that the «thing» 2. The existence of a perception that the «thing» satisfies that need or desire.satisfies that need or desire.
3. The existence of a 3. The existence of a control over the capability control over the capability of of satisfying that need or desire.satisfying that need or desire.
THAT WHICH IS PRODUCED IN ORDER TO BE SOLDTHAT WHICH IS PRODUCED IN ORDER TO BE SOLD
Scarcity and utility have been the «criteria» to assess the value of any goods Scarcity and utility have been the «criteria» to assess the value of any goods «If we were surrounded by an unending abundance of both water and diamonds, we
probably wouldn't value either very much»
The «paradox of value»The «paradox of value»
The case of diamonds and waterThe case of diamonds and water
How do you explain that something could be extremellyHow do you explain that something could be extremelly valuable and yet be «cheap» while another thing with valuable and yet be «cheap» while another thing with
almost no value comes to be so expensive ?... almost no value comes to be so expensive ?...
The paradox of ValueThe paradox of Value
Semantics and the need of Semantics and the need of rigour in scientific languagerigour in scientific language
Guilherme da Fonseca-Statter
The contradictions in Mainstream EconomicsThe contradictions in Mainstream Economics
The «labour» cost in the «production» of diamondsThe «labour» cost in the «production» of diamondsversusversus
The «labour» cost in the «production» of waterThe «labour» cost in the «production» of water
Scarcity as a direct function Scarcity as a direct function of labour cost of productionof labour cost of production
The «paradox of value»The «paradox of value»
The permanent (dynamic, dialectical...) The permanent (dynamic, dialectical...) movement of valuation and devaluationmovement of valuation and devaluation
of both Capital and Labourof both Capital and Labour
With the passing of historical time and the ongoing growthWith the passing of historical time and the ongoing growthof productivity, it has become possible (and easier, and of productivity, it has become possible (and easier, and
easier...) to fabricate more and more of whatever goods. easier...) to fabricate more and more of whatever goods. And of a better quality, too !...And of a better quality, too !...
Guilherme da Fonseca-Statter
Two distinct approachesTwo distinct approachesMetodological HolismMetodological Holism
From systemic totality to component partsFrom systemic totality to component partsParts could be distinct and complementaryParts could be distinct and complementary
producers, consumers, entrepreneurs, workers,producers, consumers, entrepreneurs, workers,peasants, intelectuals, engineers, managers...peasants, intelectuals, engineers, managers...
«Substance» of Value = «embedded» average social work«Substance» of Value = «embedded» average social workMetodological Individualism Metodological Individualism
From component parts to systemic totalityFrom component parts to systemic totalityParts are deemed to be all alike Parts are deemed to be all alike
… … we all are we all are «homo economicus»«homo economicus»«Substance» of Value = One's perception of Utility«Substance» of Value = One's perception of Utility
Value and the Work of ArtValue and the Work of Art
Guilherme da Fonseca-StatterGuilherme da Fonseca-StatterJune 2013June 2013
The Labor Theory of Value Revisited – Part 4The Labor Theory of Value Revisited – Part 4
WHAT HAS THEWHAT HAS THE
WORK OF ART GOTWORK OF ART GOT
TO DO WITH ALL THIS ?TO DO WITH ALL THIS ?
Simply the paradigmatic EXAMPLESimply the paradigmatic EXAMPLE
used used to discard the Labor Theory of Value !...to discard the Labor Theory of Value !...
Which theory happens to have an objective characterWhich theory happens to have an objective character(as opposed to the subjective criteria of marginalism)(as opposed to the subjective criteria of marginalism)
Also assumes that VALUE IS ADJUSTED TO SOCIETAL EVOLUTIONAlso assumes that VALUE IS ADJUSTED TO SOCIETAL EVOLUTION
It is capable of integrating in its «theoretical edifice» the monetary It is capable of integrating in its «theoretical edifice» the monetary criteria of quantification used with the principles of marginalismcriteria of quantification used with the principles of marginalism
MORE COMPREHENSIVE...MORE COMPREHENSIVE...
WHAT HAS THE WORK OF ART GOT TO DO WITH THIS ?WHAT HAS THE WORK OF ART GOT TO DO WITH THIS ?
«Pluralitas non est ponenda sine neccesitate»«Pluralitas non est ponenda sine neccesitate»«Between two competing theories, one needs not to complicate»«Between two competing theories, one needs not to complicate»
Intellectuals and the MarketIntellectuals and the Market«Working with your head and thinking with your hands»«Working with your head and thinking with your hands»
ARTISTSARTISTS● An aesthetic functionAn aesthetic function● between between ApolloApollo and and DionysusDionysus
The economic functionality of ART The economic functionality of ART –
EMOTIONAL WELL BEING AS A FACTOR OF PRODUTIVITYEMOTIONAL WELL BEING AS A FACTOR OF PRODUTIVITY
Culture as an economic assetCulture as an economic asset
CreatorsCreatorsInterpretersInterpreters
«Marchands»«Marchands», promotors, agents, specialized media..., promotors, agents, specialized media...
Back to the «paradox of value»Back to the «paradox of value»
An economic good is supposed to satisfy three criteria:An economic good is supposed to satisfy three criteria:
1. To satisfy a human need or desire.1. To satisfy a human need or desire.
2. The existence of a perception that the «thing» 2. The existence of a perception that the «thing» satisfies that need or desire.satisfies that need or desire.
3. The existence of a 3. The existence of a control over the capability control over the capability of of satisfying that need or desire.satisfying that need or desire.
THAT WHICH IS PRODUCED IN ORDER TO BE SOLDTHAT WHICH IS PRODUCED IN ORDER TO BE SOLD
Scarcity has been used as «criteria of assessment» of any goods value Scarcity has been used as «criteria of assessment» of any goods value «If we were surrounded by an unending abundance of both water and diamonds,
we probably wouldn't value either very much»
"Price is what you pay. Value is what you get""Price is what you pay. Value is what you get" Warren Buffett - North-American BillionaireWarren Buffett - North-American Billionaire
WHAT HAS THE WORK OF ART GOT TO DO WITH THIS ?WHAT HAS THE WORK OF ART GOT TO DO WITH THIS ?
«the value«the value (of a good)(of a good) depends depends exclusivelyexclusively on the utility that the on the utility that the public decides to attribute to it, on the whims of a consumer»public decides to attribute to it, on the whims of a consumer»
But... that «value» (the author should then use here the word «price») But... that «value» (the author should then use here the word «price») also depends, as the same author ends up acknowledging, onalso depends, as the same author ends up acknowledging, on
«on various other things, such as packing, design, variety, «on various other things, such as packing, design, variety, quality assurance, customer service. In an information society quality assurance, customer service. In an information society these aspects are decisive». these aspects are decisive».
The «foundational» argument againstThe «foundational» argument againstthe LaborTheory of Valuethe LaborTheory of Value
«If a bar of gold with a weight of 10 kilosa bar of gold with a weight of 10 kilos, worked upon by a common artisan, exchanges for 40 tons of iron... for what reason a bar of gold with a weight of 10 a bar of gold with a weight of 10 kiloskilos, transformed into an elaborated cup of gold by a great sculptor sucha as Benvenuto Cellini, exchanges for 4.000 tons of iron»?...
Page 86 of Bohm-Bawerk...
The «foundational» argument againstThe «foundational» argument againstthe LaborTheory of Valuethe LaborTheory of Value
«If a bar of gold with a weight of 10 kilosa bar of gold with a weight of 10 kilos, worked upon by a common artisan, exchanges for 40 tons of iron... for what reason a bar of gold with a weight of 10 kilosa bar of gold with a weight of 10 kilos, transformed into an elaborated cup of gold by a great sculptor such as Benvenuto Cellini, exchanges for 4.000 tons of iron»?...
Page 86 of Bohm-Bawerk...
Methodological Individualism Methodological Individualism as opposedas opposed to Methodological Holism to Methodological Holism
Ignoring the social time required for a sculptor to become a «great sculptor»Ignoring the social time required for a sculptor to become a «great sculptor»
Training/Coaching requires the use of social resourcesTraining/Coaching requires the use of social resources
«Talent» is a gift of Nature, without hard work it is worth next to nothing...«Talent» is a gift of Nature, without hard work it is worth next to nothing...
Virgin lands and «gold mines» require hard work in order to become productive...Virgin lands and «gold mines» require hard work in order to become productive...This is a common example provided by Bohm-BawerK and his current (today) supportersThis is a common example provided by Bohm-BawerK and his current (today) supporters
BalletBallet
Musical performancesMusical performances
Theater, OperaTheater, Opera
Circus, Circus, bull figthing (?...)bull figthing (?...)
TalentTalent – a gift of – a gift of Nature Nature
Training timeTraining time – coaching, work – coaching, work / energy / energy
The case of performing arts The case of performing arts
The American Society of AppraisersThe American Society of Appraisers
What about the What about the professionals professionals themselves?themselves?
Pricing your work of art...Pricing your work of art...using the principles of labour theory of value!using the principles of labour theory of value!
«The main goal of sensible art pricing is that similar works of art have similar selling prices. You, the artist, decide what those similarities are based on criteria you choose».
«Describe these works, in writing and in detail, in terms of basic physical characteristics as well as in terms of variables unique to your art. Basic physical characteristics include size, subject matter, color, complexity, weight, detail, cost of materials, cost of materials, time necessary to createtime necessary to create, and so on. Variables unique to your art might include the number of dogs in the composition, theme, texture, frequency of use of the color orange, direction of the brush strokes, date produced, or degree of abstraction.»
To think dialectically...To think dialectically...
«To describe your art such as what it means to you, what its message is, how it makes you feel, and so on, avoid using subjective criteria».
«Subjective qualities are important from an intellectual and/or emotional standpoint, but not necessarily in terms of but not necessarily in terms of pricingpricing as they can vary widely from one viewer to the next. No one, however, can dispute the size or subject matter of a work of art.»
«If, over time, you find that some of your art imparts similar feelings or messages to wide audiences, you may eventually be able to quantify those feelings or messages as price points.»
Inter–subjectivity = objectivityInter–subjectivity = objectivity
THANK YOU !THANK YOU !
Guilherme da Fonseca-StatterGuilherme da Fonseca-StatterJune 2013June 2013